American Woodmark Corp (NASDAQ: AMWD)

Sector: Consumer Cyclical Industry: Furnishings, Fixtures & Appliances CIK: 0000794619
Market Cap 857.87 Mn
P/B 0.92
P/E 13.65
P/S 0.54
ROIC (Qtr) 4.00
Div Yield % 0.00
Rev 1y % (Qtr) -12.78
Total Debt (Qtr) 494.74 Mn
Debt/Equity (Qtr) 0.53
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About

American Woodmark Corporation (AMWD) is a prominent entity in the manufacturing industry, specifically specializing in kitchen, bath, and home organization products. The company has built a solid reputation and established itself as a market leader in the cabinet industry, with over 8,600 employees and a presence in 18 manufacturing facilities across the United States and Mexico. The company's main business activities revolve around the production and distribution of a wide range of products. These include kitchen and bath cabinetry, office cabinetry,...

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Investment thesis

Bull case

  • Operating cash flow of 99.97M provides strong 14.14x coverage of stock compensation 7.07M, indicating sustainable incentive practices.
  • Robust tangible asset base of 798.24M provides 3.91x coverage of working capital 204.10M, indicating strong operational backing.
  • Retained earnings of 581.70M provide full 1.28x coverage of long-term debt 453.85M, indicating strong internal capital position.
  • Tangible assets of 798.24M provide robust 9.82x coverage of other current liabilities 81.32M, indicating strong asset backing.
  • Operating cash flow of 99.97M fully covers other non-current liabilities 6.49M by 15.40x, showing strong long-term stability.

Bear case

  • Operating cash flow of 99.97M barely covers its investment activities of (40.29M), with a coverage ratio of -2.48, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 52.07M against inventory of 184.84M, the 0.28 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Operating earnings of 94.43M show weak coverage of depreciation charges of 102.01M, with a 0.93 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 102.01M relative to operating cash flow of 99.97M, which is 1.02x suggests significant maintenance capital requirements affecting free cash flow.
  • Free cash flow of 59.67M represents just -7.68x of debt issuance (7.76M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Peer comparison

Companies in the Furnishings, Fixtures & Appliances
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 SGI Somnigroup International Inc. 18.99 Bn 125.40 7.03 6.62 Bn
2 SN SharkNinja, Inc. 18.48 Bn 32.14 3.04 0.89 Bn
3 MHK Mohawk Industries Inc 8.23 Bn 19.54 0.77 2.34 Bn
4 PATK Patrick Industries Inc 5.10 Bn 175.24 10.70 1.53 Bn
5 WHR Whirlpool Corp /De/ 4.88 Bn 15.36 0.31 7.19 Bn
6 HNI Hni Corp 2.23 Bn 44.66 1.16 0.46 Bn
7 TILE Interface Inc 2.17 Bn 30.23 2.24 0.39 Bn
8 LEG Leggett & Platt Inc 1.59 Bn 5.64 0.39 1.66 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.83 0.98
EV to Cash from Ops. EV/CFO 13.08 -9.92
EV to Debt EV to Debt 2.64 25.70
EV to EBIT EV/EBIT 13.84 17.69
EV to EBITDA EV/EBITDA 7.06 15.96
EV to Free Cash Flow [EV/FCF] EV/FCF 21.91 17.28
EV to Market Cap EV to Market Cap 1.52 1.76
EV to Revenue EV/Rev 0.82 1.40
Price to Book Value [P/B] P/B 0.92 9.34
Price to Earnings [P/E] P/E 13.65 16.89
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 1.74
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 9.37
Dividend per Basic Share Div per Share (Qtr) 0.00 0.51
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 28.74
Interest Coverage Int. cover (Qtr) 6.62 -23.23
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 50.22 -9.80
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -8.20 70.23
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 0.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -33.84 -367.80
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -25.96 -34.93
EBIT Growth (1y) % EBIT 1y % (Qtr) -35.56 -198.55
EBT Growth (1y) % EBT 1y % (Qtr) -41.91 -72.49
EPS Growth (1y) % EPS 1y % (Qtr) -37.04 -131.79
FCF Growth (1y) % FCF 1y % (Qtr) 1.45 0.53
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -25.68 -2.36
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.02 1.16
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.13
Cash Ratio Cash Ratio (Qtr) 0.29 0.30
Current Ratio Curr Ratio (Qtr) 2.15 1.96
Debt to Equity Ratio Debt/Equity (Qtr) 0.53 0.57
Interest Cover Ratio Int Coverage (Qtr) 6.62 -23.23
Times Interest Earned Times Interest Earned (Qtr) 6.62 -23.23
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 12.30 -2.26
EBIT Margin % EBIT Margin % (Qtr) 5.92 -4.46
EBT Margin % EBT Margin % (Qtr) 5.02 -7.49
Gross Margin % Gross Margin % (Qtr) 16.00 33.73
Net Profit Margin % Net Margin % (Qtr) 3.90 -8.04